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- **Revenue growth**: Q2 net sales up 6.4% to $221.5M, driven by brake and heavy-duty products. 6-month sales up 8.4%.
- **Margin improvement**: Gross profit at $42.7M (+3.5%), offset by $3.6M noncash expenses. Adjusted gross margin slightly higher.
- **Cash flow strength**: 6-month operating cash flow of $31.9M; 12-month free cash flow of $73.9M. Debt reduced by $24.6M to $56.7M.
- **Strategic initiatives**: Share buybacks of 287,910 shares ($3.4M) and plans to continue if undervalued. Focus on Mexico market expansion.
- **Key risks**: Temporary customer delay offsetting one-time revenue gain; industry deferral trends limited by product necessity.

**【CEO Summary Section】**
- **Strong financial performance**: Q2 net sales of $221.5M (+6.4% YoY), gross profit of $42.7M (+3.5%), and operating cash flow of $21.9M. 6-month sales up 8.4% to $409.8M.
- **Key growth drivers**: Brake-related products (e.g., Mexico-manufactured calipers) and heavy-duty aftermarket business. Mexico market sales growing nicely.
- **One-time revenue impacts**: $14.8M core revenue gain offset by $14.8M delay from a large customer, expected to reverse in H2.
- **Long-term tailwinds**: Aging U.S. vehicle fleet (12.8 years avg age) and high new car prices driving replacement demand.
- **Financial strength**: Reduced net bank debt by $24.6M to $56.7M in 6 months; share buybacks of 287,910 shares ($3.4M).

**【CFO Financial Commentary】**
- **Gross margin dynamics**: 19.3% (vs 19.8% YoY), impacted by $3.6M noncash expenses and $0.7M onetime costs. Adjusted gross margin slightly improved.
- **Operating efficiency**: Operating expenses down 8.3% to $26.4M, driven by $1.5M FX gain vs $5.4M loss YoY.
- **Cash flow strength**: 6-month operating cash flow of $31.9M vs $2M YoY. 12-month free cash flow of $73.9M.
- **Debt reduction**: Net bank debt down $98M over 2 years to $56.7M; liquidity of $161M.
- **Share buybacks**: 90,114 shares repurchased in Q2 at $15.41 avg price.

**【Q&A Key Highlights】**
- **Consumer deferral impact**: Temporary delay from a customer's warehouse restructuring, expected to reverse in H2. CEO emphasizes nondiscretionary nature of products limits long-term deferral.
- **Market share trends**: Brake products gaining momentum; no material changes in core market share. Heavy-duty business growing.
- **First Brands situation**: No direct impact; company focuses on reliability and integrity to capitalize on industry opportunities.
- **Cash utilization**: Plan to continue share buybacks if undervalued; maintain strong liquidity for growth opportunities. Debt levels considered low and comfortable.

Motorcar Parts of America, Inc. (MPAA) Q2 2026 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

MPAA

MPAA fundamentals

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